Posts Tagged ‘credit card’

Is It Illegal Using the Credit Card for Online Gambling?

Date Monday, 27 September 2010  Posted in Category Computer Resources  Tags ,   Comment No Comments »

Is It Illegal Using the Credit Card for Online Gambling?

One of my friend asked me the above question and if my answer to him is ‘yes’, then he would like to know what’s the best way to avoid going against the law.

First, to answer his question- is it illegal using the credit card for online gambling?

For Malaysian, the answer is yes- it is illegal. You can refer to your credit card issuing bank’s terms and conditions. There’s a statement in T&C section mentioned like this:
Any card issued to me / us shall not be used by me / us for any unlawful activity or purpose (including without limitation online gambling), whether in whole or part.

Solution to avoid going against the law

I have asked him for the gamble website address to further study and research in order to provide him the right answer and found that there’s a way gambler can ‘deposit’ money into the gamble account from the credit card without going against the banking T&C. The gamble website normally accept third parties e-money/e-wallet such as Click2Pay and We called these third parties ‘payment gateway service providers’, what a gambler can do is to deposit the fund into the gambling website via these third parties. Of course, there will be a percentage of transaction fee charges that needs to be paid from 3% to 5%.

Problem withdrawing the money that you won

Credit card does not accept fund deposit. Alternatively, the gambler can withdraw the money through a few way:
– Cheque
– Transfer to your bank (bank, account, name and etc are required to be provided)
– WesternUnion

Well, with the convenience of Western Union, the advantage is that people can withdraw the money earned from the Internet (such as trading and blog ads); the disadvantage is that an easy way for money laundering.

Bottom line

Gambling is not good for life, getting addicted to this game can cause a lot of bad effects. With the convinience of Internet, people can sit right in front the computer losing thousand of dollars.

Internet Merchants, How Can You Prevent and Reduce Fraudulent Activity on Your E-commerce Website?

Date Thursday, 15 October 2009  Posted in Category Computer Resources  Tags , , ,   Comment 2 Comments »

You may want to setup an e-commerce website to increase profit from online marketplace. Before that, you need to know a little something about the negative impact and the disadvantages of accepting credit cards payment online.


A chargeback occurs when an individual credit card holder contacts the credit card issuing bank to deny and claims that he or she did not authorise a transaction made and request to dispute the charges. The credit card issuing bank will then take the money back from the acquiring bank (merchant bank). Chargebacks are typically reported on a weekly or bi-weekly basis by the acquirer to the merchant, costs to the merchant when this happens include:

  • Loss of merchandise
  • Loss of revenue
  • Per-chargeback administration fees (such as RM45)
  • Fines for chargebacks (depends on the number of disputed transaction incidents)
  • Risk of losing merchant account due to high chargeback rates, and associated loss of ability to accept credit cards payment online.

The above diagram is a typical Internet credit card transactions process flow model

Approaches to managing fraud

When you are setting up or selecting a billing system on your e-commerce website, ensure the following approaches are implemented:

  • Address Verification Service (AVS)
    Request for the billing address (statement address) to be submitted for credit card issuing bank’s verification. It can help reduce fraud when the perpetrator does not have a billing address.
  • Details As Per Statement
    Request for the credit card holder’s statement name instead of name on card to be submitted for credit card issuing bank’s verification.
  • Card Verification Code/Value (CVC/CVV/CVV2)
    Request for the CVV (3-4 additional digits which is printed on the back of the credit card) to be submitted for credit card issuing bank’s verification. These digits do not appear on credit card statements, it indicates the purchaser has the physical card or its details.
  • Image Verification Service (IVS) / CAPTCHA
    Request purchaser to enter the random image for authentication. Because IVS requires a humans to type the random words that appear, it can prevent the Internet auto-submission-bot attack.
  • Rules-Based Systems / Manual Review of Orders
    Create your own rules-based system for automating the review of orders before submiting for credit card issuing bank’s verification. If the transactions amount (such as large orders or expensive items) has exceeded your rules set, the purchaser information will need to be verified (such verifications like- is this a new customers? is this shipping address same as billing address? does this order required manual review? etc).
  • SecureCode Verification by Credit Card Issuing Bank
    Many local credit card issuing bank have already implemented the SecureCode verification as the 2nd layer authentication on Internet credit card transactions. To obtain this SecureCode, the credit card holder is required to submit other P&C information for process (such as mother name, mobile number, home branch and etc).

One of the local cinemas' e-ticketing system, which perpetrator needs only a few of credit card details- card number, name on card, expiry date and CVC. This type of simple authentication form which can make fraud easier.

Bottom line

credit-card-frontAlthough each of above approaches can help, but remember that the Internet transaction is considered a “Card-Not-Present” transaction by the credit card issuing bank. The merchant is still wholly responsible for the fraudulent transaction, even if the merchant has proof of signature during the delivery.

In any Internet fraudulent transaction incident, the merchant is always on the losing side. So selecting a good e-commerce plan and a reliable payment gateway service provider is pretty important.

An Internet Fraudulent Transaction Happens to Your Credit Card, What Should You Do?

Date Monday, 12 October 2009  Posted in Category Computer Resources  Tags ,   Comment 1 Comment »


When you received credit card statement and there’s an unathorised Internet transaction billed to your credit card…

Don’t panic when this happens to you. This is not your responsibility to bare the transaction billed amount*, follow the procedure below and you will get it adjusted:

  1. Identify the transaction billed- merchant name, transaction date, amount and statement.
  2. Confirmed the transaction billed was not made by anyone like family members, boy/girl friend or colleague that you authorised to use your credit card details.
  3. Call your credit card issuing bank and speak to the customer representative to report Internet fraudulent transaction on your credit card. Request them to fax / email / post you the “Disputed Transaction Form“.
  4. Consult the customer representative on whether there is a re-issue of a new credit card is required. (charges may apply to some bank)
  5. Fill out the form then fax / post it back to them. Call your credit card issuing bank again to ensure they have received your form.
  6. The administration and investigation process will usually take about a month to complete, the transaction billed amount shall be credited into your account and stated in your next month statement.*
  7. No finance charge and/or investigation charge shall be levied.*

* In the event that the investigation reveals that you- the credit card holder is not liable for any of the disputed transactions.

Do you know?

When merchants (online store) accept credit cards over the Internet, the transaction is considered a “Card-Not-Present” transaction by the issuing bank (your credit card bank), because the merchant doesn’t see the physical card or signature.

In “Card-Present” transactions, the issuing bank usually covers the cost of the transaction, sometimes after charging the credit card holder a minimum fee (such as RM20). With “Card-Not-Present” transactions, the merchant is wholly responsible for the fraudulent transaction, even if the merchant has proof of signature during the delivery.

So, credit card fraud is a significant challenge for Internet merchants. Fraud can end up being very costly especially to merchants that are selling tangible products and can even result in loss of a merchant account.